- OPEC+ sources indicated that the current cuts could next week be extended into Q2.
- A new Gaza ceasefire proposal is under review as the death toll crosses 30k, including 112 in a single incident this week.
- Abu Dhabi is hosting a WTO meeting and ministers met on the sidelines for UK-GCC FTA talks.
- Aramco revised up by 7% the reserves of its giant Jafurah unconventional gas field.
- PIF issued a $2bn 7-year sukuk at +85bp, on top of $8.5bn in bonds and sukuk since October.
- Sharjah issued a $750m 12-year sustainable bond at +195bp. [see https://www.dhirubhai.net/feed/update/urn:li:activity:7168632989139058689/]
- Sharjah’s 2023 inflation of 1.8% was mid-way between Abu Dhabi and Dubai.
- An Abu Dhabi bond is reportedly under consideration.
- As expected, the UAE was removed from the FATF gray list after improving its AML/CTF regime.
- Dubai is selling a 25% stake in Parkin its state-owned car parks, in its third transit-related IPO.
- The UAE has paid the first installment of a transformational $35bn investment in Egypt through ADQ. [see (1) below]
- Qatar announced yet another phase of LNG expansion, North Field West, equivalent to a fifth of current output. [see https://www.dhirubhai.net/feed/update/urn%3Ali%3Aactivity%3A7168940341864116224/]
- QIA announced plans for a $1bn regional VC fund of funds and pledged to invest €10bn in France.
- Kuwait has scheduled elections for 4 April, after the Amir recently dissolved parliament.
- Oman is nearing the conclusion of a trade deal with India, which would be its first bilateral since 2006. [see (2) below]
- Bahrain’s parliament is pushing to reserve key sectors for Bahraini employees, which the government opposes.
These headlines are taken from a 3,800-word report from my economic research service with GlobalSource Partners, Inc., a leading source of independent emerging market intelligence. Click on any report to get guest access and contact me or GlobalSource’s sales team for more information about subscribing to the service, which also includes an extensive GCC Databank, updated weekly.
Here are two brief snippets from the report:
(1) UAE invests $35bn in Egypt
- ADQ, the newest of the Abu Dhabi sovereign wealth funds, will make a front-loaded investment of $24bn to develop Ras El-Hekma, a 170sq km peninsular on the Mediterranean coast, mid-way between Alexandria and the Libyan border.
- There are several resort hotels nearby but most of the coast is undeveloped and there are only 5% of the hotel room there as on Egypt’s Red Sea coast, and the development aims to attract 8m tourists a year, on top of Egypt’s existing 15m (map, FT). Egypt will hold 35% of the equity in the project, which is envisaged to include a free zone and financial center, as well as beach resorts, and an international airport. The development is targeting $150bn in co-investment from the private sector. In addition, ADQ will invest $11bn into projects across Egypt (Rt, Nat).
- President Sisi confirmed on Thursday that some funds had already been received, with more expected today; Egypt’s prime minister had previously said that the first $10bn in cash was expected this week, with a further $14bn coming within two months. The UAE’s $11bn in deposits at the Egyptian central bank will also be converted into EGP to be utilized for the project. (BB).
- There was a strong positive market response in the forwards and black-market rates for the EGP, although still well above the official rate of EGP30.9. Bonds also surged to the strongest in nearly two years, with the average yield on dollar bonds dipping below 10%, half the peak level in September. Conversely, equities declined, as they have been used as a hedge against devaluation (BB).
- The improvement in Egypt’s finances should help in complying with the IMF program and in expanding it to $10bn. Moody’s estimates that these changes will cover Egypt’s external financing gap until its 2026 fiscal year, rebuild its FX buffers and thereby reduce pressures for an extreme depreciation (although Moody’s does expect an adjustment to EGP40:USD1).
(2) Oman is negotiating a trade deal with India
- An FTA with India may be near to completion, only three months after talks began (BB).
- India is an important trade partner, including as a buyer of fertilizers and metals, and also an investor in these sectors, which would see reduced tariffs.
- Indians also comprise the largest group in the expatriate population and, unusually in the Gulf, some longstanding Indian families have Omani nationality.
- This would also be significant as the first bilateral trade deal Oman has signed since one with the US in 2006. The signing of that deal resulted in a reaction from the GCC towards negotiating as a bloc but that strategy has not yielded much in the way of results, causing the UAE to shift back to bilateral deals in recent years.
